Personal Tax Planning for GPs: What to do before 5 April

As we approach the end of another tax year, it’s a good time for GPs to review personal tax planning. Here’s what you need to know to make the most of the current rules and prepare for what’s ahead.
 

1. Pensions

For most GPs, the NHS Pension Scheme remains the mainstay of retirement planning. The abolition of the Lifetime Allowance(LTA) may allow for additional contributions to be made, subject to the Annual Allowance limit of £60,000. For some, this can help offset the impact of the loss of the tax-free personal allowance or help avoid moving into the additional rate band. However, from April 2027, residual pension pots will become subject to inheritance tax (IHT).
 

2. Business premises

GPs with business assets (eg premises), should be aware that the Government’s reduction to IHT relief for business and agricultural assets takes effect from April 2026. The first £2.5 million of assets will be exempt from IHT (ie £5 million per married couple). AIM shares will only qualify for 50% relief.

GPs who have held their business premises within a SSAS or SIP to get 100% IHT relief should consider buying back the property from the pension since a business premises held in your own name will qualify for 50% relief, but pension assets held at death will not.
 

3. Use your ISA allowances

You can invest up to £20,000. Parents can fund a junior ISA or child trust fund with up to £9,000 per child (eg to support children through higher education). However, from April 2027 a cash subscription limit of £12,000 will apply for under-65s.

You should consider selling shares yielding dividends outside an ISA and buying them back within this tax-exempt wrapper, but take care if this could trigger a capital gains tax charge.
 

4. Review your capital gains

Everyone can realise tax-free capital gains up to the £3,000 annual exemption.  Married couples and civil partners can transfer assets between them on a no gain/no loss basis so consider marking transfers to ensure that annual exemptions can be fully used. Review your investments to match gains and losses to cut your overall tax bill. If you think the loss-making shares have long term potential, you can’t buy back them back immediately (a 30-day matching rule applies) but you can buy alternative shares in companies in the same sector, or buy them through your ISA, or your spouse could invest in them.
 

5. Review your PAYE code

This can be done by logging into your personal tax account. Here you can inform HMRC about any changes that are likely to affect your tax code during the tax year. Helping HMRC to get it right from April onwards means you  shouldn’t have any nasty surprises later.
 

6. Plan for the longer term

Significant changes to IHT for pensions and business assets are prompting many GPs to rethink how their wealth will pass to the next generation. It is a good time to review your Will/letter of wishes to make sure it remains tax-efficient and consider if lifetime giving (both lump sums and/or regularly out of surplus is right for the family’s finances.

Remember, it’s always best to take  expert advice on financial and tax planning matters – so get in touch with our team.